All-Ireland economic vision required now more than ever

THE present economic conditions affecting this island demands a common purpose approach by Finance Ministers, North and South. Such an approach has been recommended by business organisations as the means to kick-start economic recovery and get Ireland back to work. I am of the firm opinion that our economic recovery will come more from indigenous efforts rather than a slavish expectation that Foreign Direct Investment (FDI) miracles will drop out of the sky.
While it is important that we continue to seek FDI, it is an inescapable fact that large-scale job creation through Foreign Direct Investment in the immediate future is highly unlikely. It is also undeniable that a significant majority of employment on this island has been created by indigenous companies. Therefore, commonsense would dictate that our focus in the present conditions should be on encouraging and assisting local manufacturers and SMEs to invest in R&D, improve competitiveness and seek export markets.
We need to redirect the major investment incentives devoted to promote FDI to dedicated initiatives which are designed to assist indigenous companies to upgrade their operations and to enable them to compete with the foreign companies that presently monopolise our export markets.
A first course of action would be to explore the possibility of merging InvestNI and the Industrial Development Agency. The presence of two competitive investment bodies is wasteful and detrimental to economic recovery for both parts of the country. What is required is imaginative forward planning, co-operation on an island economic strategy, and a concentration on self-determining Irish economic recovery.

Having two competitive investment bodies – InvestNI and the Industrial Development Agency – is wasteful and detrimental to economic recovery for both parts of the country 

Despite the economic turmoil, the Irish Government nevertheless has the wherewithal to take the necessary measures to correct the worst effects of the economic conditions.
The Northern economy unfortunately suffers from a dual malaise: it is abnormally dependent on the public sector and has no fiscal autonomy. And so long as economic sovereignty over the Six Counties is exercised by the British Government it will not be possible for the North to reach its full economic and developmental potential. The preference of some unionist politicians for economic dependency rather than look southwards only serves to exacerbate the North’s economic difficulties.
I believe that a single investment and job-creation agency approach would free up additional finances by eradicating the waste of duplication, opening wider opportunities to business throughout the island and generally contribute to reviving the economy.
The measures taken by Finance Minister Brian Lenihan in the 26-County Budget and the predicted response by the British Chancellor as we go to print have a common thread. Both governments choose to punish those who had no part in creating the conditions that precipitated the economic collapse whilst pouring billions of taxpayers’ money into bail-out measures to rescue those who created the mess.
 As Brian Lenihan failed to take account of the effect of Dublin’s tax regime on those communities along the border, neither will Alastair Darling take any account of the unique economic conditions pertaining in the North. All indications are that he will renege on the retention of efficiency savings commitments given to the Assembly parties by Gordon Brown. The obvious way to eliminate the adverse effects of both Dublin and London’s budgetary failings is through harmonising the taxation and fiscal regimes through an all-Ireland economy.